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Market Commentary 20/05/16

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EUR/USD – Stop Run Above The Highs

A couple of hours ago we saw the market break above the high made yesterday and begin to fall lower. The reason its falling is because of the buy stops which were hit when the market breached past the top of the high.

Most of the sell stops were found at the 1.12300 level, when the price rose the stops were hit and the resulting candle turned out to be a bearish pin bar.

What we need to do now is watch to see if the drop from the sell stops continues or if it fails and market breaks to new highs. The extent of the current drop the market has been in since the beginning of May is looking rather overextended, I don’t think it’ll be long now before we see a retracement take place on the daily chart as lots of trader will be entering into short trades because of the vertical nature of this drop.

USD/JPY – Market Making New Highs After Touching The Demand Zone

The demand zone which was spiked yesterday has managed to push the market above the highs which were put in place yesterday morning.

The break above the highs signals to us more upside in the near future but we must be careful because the price is only 80pips away from a daily supply zone which formed 15 days ago. This supply was caused by bank traders placing sell trades if the market returns to this zone they may want to place more sell trades for when the downtrend gets back underway.

On Monday watch for a continuation higher, at the minute we do not have any technical levels we can use to get a long entry off but a small retracement may occur before tonight closes and this might produce some new levels for use to watch for entries.

AUD/USD – Retracement Higher, Possible Continuation

After yesterdays daily candle ended up being a bullish pin bar today we have seen the price drop slightly but a failure to drop by a large distance suggests a continuation higher could be possible next week.

Really we need to see the current high be broken before we have sufficient evidence to confirm a bigger retracement taking place.

Currently we are seeing some bullish price action enter the market which may signal the beginning of the move which will break the highs. Next week one of the members of the RBA is speaking and its likely this will cause significant movement in the market, possible causing the multi-day retracement I spoke about in my last post to form.

Finding Supply & Demand Zones That Work!

How Old Supply And Demand Zones Do Not Cause The Market To Reverse And The Reason Why ﻿Traders ﻿Mistakenly ﻿Believe They Do

Why The Time It Takes For The Market To Return To A Supply Or Demand Zone Will Determine Weather The Zone Has A High Chance Of Causing A Reversal To Take Place

The Differences Between Zones Created By Bank Traders Taking Profits And Zones Created by The Bank Traders Placing Trades